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GAME close to collapse, EA boss “confident” of market

Monday, 12th March 2012 07:23 GMT By Johnny Cullen

GAME has said this morning it’s “working actively” to resolve current stock issues and reviewing the business, including “all of its assets in the UK and international territories.”

“Further to GAME’s announcement of 29th February 2012 and recent press speculation, the Group confirms that it remains in discussions with its suppliers and lenders in relation to terms of trade that allow the business to operate within the facility provided by its banking syndicate, as announced on 3 February 2012, and to meet its revised strategic plan,” a GAME statement this morning sent to MCV reads.

“While these discussions are ongoing, it has not been possible to source new products from a number of suppliers.

“The Board of GAME is working actively to resolve these issues as quickly as possible. This includes ongoing discussions with suppliers, seeking access to the original facility or alternative sources of funding, and reviewing the position of all of its assets in the UK and international territories.

“It is uncertain whether any of the solutions currently being explored by the Board will be successful or will result in any value being attributed to the shares of the Company.”

The statement comes The Sunday Times reported (via MCV) yesterday that the store has put itself for sale ahead of a two week deadline to pay landlords.

Its put in charge financial advisory group Rothschild in finding a buyer, with something similar possibly happening to its Australian and French arms. Deloitte will apparently handle its insolvency process if it comes to it.

It follows a report at the end of last week that senior staff were told to prepare for the worst and expect administration.

Before that, it was rumoured that US retailer GameStop had been interested in a takeover, with possible added interest towards GAME’s Iberian arm.

When asked about a “UK retailer in distress” at a Wedbush Morgan event last week, while specifically avoiding to call it by name, EA CEO John Riccitiello said other retailers will grab hold of the puck that GAME has seemingly let go of.

“I’m really confident that the consumer that wants to buy Mass Effect or Madden or FIFA or whatever, if a particular retailer is gone, other retailers will absorb the business,” he said.

“But I think in the fullness of time, I am extremely confident that, whether it’s UK or France, or United States, et cetera, the retail marketplace will absorb that business.

“I don’t think we’re going to – we might lose 20,000 copies of Mass Effect 3 in the UK for the consumer that can’t figure out another store to go to, but that would even surprise me. I mean I think we’ll sell every unit.

“So, we love great retailer partners, and we, like I mentioned GameStop earlier and Best Buy and Amazon and others. They’re great for us. If one goes away, the other guys pick up the slack. I really don’t see it as anything other than a very temporary dislocation.”

Meanwhile, shares in GAME have dropped to a record low of 0.5 pence.

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13 Comments

  1. brokenkey

    “yeah, people might lose their jobs, but as long as I can sell my stock I’m happy”.

    In other news, the parallels between GAME’s business model, and Northern Rock’s is really quite amazing. Even down to the “Run” as people race to trade in their outstanding reward points.

    #1 2 years ago
  2. GrimRita

    What I found interesting on the BBC website is that it claims GAME has been hit hard by Steam and Amazon. Yes, Amazon I understand but Steam? Wasnt it GAMES idea to kick the PC Gamer out in the first place by reducing shelf space and only offering tatty old back cat games?

    http://www.bbc.co.uk/news/business-17336697

    #2 2 years ago
  3. silkvg247

    I don’t know of any brick and mortar stores other than GAME, gamestation, CEX and HMV. So I think the loss of GAME (which presumably also means gamestation) will have a huge impact on folks who do go out and buy physical.

    In other words he’s kidding himself if he thinks it won’t negatively affect the market. Typical EA arrogance.

    #3 2 years ago
  4. silkvg247

    @2 Yes, GAME used to be the place to go if you wanted a PC game in a hurry. They had quite an exhaustive range of old and new. When they changed that, is when they became the same muddy grey colour as every single other games retailer.

    So saying steam had any effect is stupid, unless they mean “we were stupid enough to ditch the PC market, then steam took over it”.

    #4 2 years ago
  5. TheBlackHole

    @1

    Dont make the mistake of sympathising with GAME’s position. This is entirely their own doing. They’ve spent the last ten years hardballing publishers, and now the shoe is on the other foot they suddenly want clemency and forgiveness?

    Too little, too late. They were arrogant and dominant, and now they have neither. I would far sooner see them disappear and be replaced by other stores. Of course for all the people who work there I hope their jobs are saved by a takeover, perhaps Gamestop.

    #5 2 years ago
  6. silkvg247

    @5 I think his aympathy was aimed more squarely at the in-store workers who had very little to do with the downfall.

    I keep hearing about gamestop but have never even seen a physical presence of them in the UK?

    #6 2 years ago
  7. TheBlackHole

    @6

    “I keep hearing about gamestop but have never even seen a physical presence of them in the UK?”

    I don’t mean to sound sarcastic, but why do you think they are looking to purchase GAME stores? :)

    #7 2 years ago
  8. Patrick Garratt

    http://www.game.co.uk/

    The site’s down.

    #8 2 years ago
  9. silkvg247

    @7 Because they want to go out of business? ;)

    #9 2 years ago
  10. themadjock

    Shame, looks like I won’t get my copy of Diablo 3 for £24.99 pre-order promise since 2008! I’ll end up having to pay over the odds direct from Blizzard :(

    #10 2 years ago
  11. DaveDogg

    @1 it’s not EA’s job to worry about Game it’s EA’s job to worry about EA & if they cant pay the bills why should any supplier continue to supply

    @5 there are plenty of indy game shops floating around if you care to look.

    @7 there was a Gamestop on the outskirts of Birmingham last year one day the staff turned up for work and the the store was closed down for good

    #11 2 years ago
  12. GrimRita

    @11 – Gamestop was actually IN the city centre. In the walkway between the Bullring and the Pallasdes(or however its spelt – stupid name anyway).

    Alot businesses have closed there – including the old Warhammer shop.

    On topic, who on earth would want to buy GAME? It’s simply bloated and outdated, with a boardroom full of old tits and twats who have done nothing but piss both publishers and consumers off but at the same time have drawn nice fat pay cheques at the expense of driving the company into the ground

    #12 2 years ago
  13. TheBlackHole

    @12

    They wouldn’t be buying game, they would wait until they closed and then rent the same buildings and hire the same staf. That’s why they haven’t come in for them sooner. Why bother taking on the debt when you can get everything for next to nothing when they go under?

    #13 2 years ago

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